Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
As promised during last month's State of the Union Address, President Obama's budget proposal for Fiscal Year 2016 allocates funding to a number of initiatives designed to promote "middle class economics." The Department of Labor alone would receive $13.2 billion in discretionary funding, part of which would go to enhancing wage and hour law enforcement, protecting whistleblowers, and assisting states with establishing paid leave programs. While the budget proposal is more opening salvo than law, it indicates where the Administration's priorities lie. The following are some of the highlights from this year's proposal.
Paid Sick Leave
While legislation requiring private-sector employers to provide their employees with paid sick time off would likely fail this congressional term, states and localities have been marginally more successful in advancing such policies. To this end, the President's budget would provide $2.2 billion in mandatory funds for the Paid Leave Partnership Initiative. This program would help up to five states establish paid leave programs and partially fund those programs for three years. An additional $35 million would be used to provide technical assistance and support to states that are still creating the infrastructure needed to provide future paid leave programs.
The Occupational Safety and Health Administration enforces the retaliation provisions in 22 separate statutes. The budget would give OSHA $3.4 million to improve enforcement of those whistleblower laws. The entire sub-agency would receive $592 million. This amount is $39 million more than that provided to the agency in 2015.
Wage & Hour Enforcement
According to DOL’s Budget in Brief, “A ticket to the middle class requires the opportunity to make a living wage. The Department understands that additional wage enforcement resources are necessary to protect American workers and their income.” DOL’s budget request includes a $50 million discretionary (22 percent) increase for the Wage and Hour Division to "improve compliance with our Nation’s labor and employment laws and protect American working families..." Among other measures, the budget includes proposals to increase civil monetary penalties against employers that violate wage and hour laws. For instance, the budget seeks the introduction of legislation that would impose a $5,000 per-violation penalty against employers for fraudulent wage and hour recordkeeping. Of the overall request of $277 million to fund the Wage & Hour Division, nearly $32 million (and 300 employees) would be allocated for additional enforcement staff and support.
The President set forth a number of proposals to increase employee participation in retirement plans. One proposal aimed at increasing part-time employee participation would make individuals who have worked for their employer for at least 500 hours per year for at least three years eligible to participate in the employer’s retirement savings plan. The budget also allocates $6.5 million for the creation of a State Retirement Savings Initiative. Under this pilot program, 2-4 states would "pilot and evaluate" a state-run 401(k)-type program. Another proposal would require every employer with more than 10 employees that does not currently offer a retirement plan to automatically enroll their workers in an IRA. The DOL's Employee Benefits Security Administration would receive $207 million under the FY 2016 budget request.
The budget allocates over $113 million to the Office of Federal Contract Compliance Programs. The enforcement goals for the OFCCP include: 1) improving its enforcement case management database system; 2) continued strategic efforts to narrow the persistent wage gap; and 3) eliminating gender, racial and ethnicity-based discrimination in the construction trades; and 4) finalizing proposed rules, implementing final regulations and educating the regulated community and workers on these new rules.
More information on the FY 2016 budget request can be found here.